Binance and SYS respond to irregular trading

After Binance’s internal risk management system detected irregular trades from a number of API users, on July the 3rd, it temporarily suspended trading, withdrawals and other account functions.

The irregularity came from an issue with Binance’s API, which caused exponential volume and market pressure to Syscoin trading. There was a sharp spike in the price of SYS and buy/sell order prices hit remarkable levels.

Sudden jump in value of SYS

Binance has stated that to “protect the safety of our API users” it has taken a number of actions relating to the incident. Primary amongst was a rollback of irregular trades and the removal of all existing API keys — with a request for all Binance API users to recreate their API keys.

In addition, Binance has warned API users to better safeguard their API keys going forward and to use the IP whitelist functionality to ensure keys are only accessible to authorized users.

“No coins were mined outside of the regular mining schedule, and the Syscoin blockchain was not compromised.” — Syscoin co-founder Sébastien DiMichele

For its part, Syscoin co-founder Sébastien DiMichele says there was no breach of the Syscoin network and the incident was purely API related. He says the Syscoin block explorer “indicated that 1.2 billion coins were transferred back and forth on the same block (block #87670), and [it] was not an attack on the network”.

DiMichele adds that “no coins were mined outside of the regular mining schedule, and the Syscoin blockchain was not compromised.”

Syscoin secures its blockchain using ZDAG technology, additionally, it is merge mined with Bitcoin, giving it a boost in hash rate and creating greater security against hackers.

Binance has provided a summation of the incident on its support site. In addition to the noted action relating to API usage, Binance is offering rebates and compensation to users affected by the outage and announced the creation of a Secure Asset Fund for Users (SAFU). Binance says beginning on the 14th of July it “will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.”

Binance’s trading suspension lifted as more details emerge about July 3rd incident